October 10, 2013
CRAPO STATEMENT AT HEARING ON THE ECONOMIC IMPACT OF DEFAULTWASHINGTON - U.S. Senator Mike Crapo (R-Idaho), Ranking Member of the Senate Banking, Housing and Urban Affairs Committee, today delivered the following remarks during a Banking Committee hearing on the impact of a default on financial stability and economic growth:
"Thank you, Mr. Chairman.
"I would like to thank our witnesses for appearing today to present their thoughts on this important topic.
"While there has been a lot of recent attention on what happens if the debt limit is not increased, there has been less attention focused on our larger, real debt crisis.
"The statutory debt limit is currently $16.7 trillion.
"Since 2009, the debt limit has been increased by $5.4 trillion.
"The Congressional Budget Office (CBO) projects that debt subject to the debt limit will reach $25 trillion within 10 years.
"The statutory debt limit is a symptom of our fiscal problems and must be addressed.
"Since we have already focused on the impact of failing to lift the debt ceiling, I would like to focus on the debt itself.
"According to recent Treasury figures, the gross debt has increased $6.1 trillion since 2009.
"Deficits are projected to be the norm as our aging population and rising health care costs push spending higher.
"Unless we make significant reforms to entitlement programs, they will crowd out all other government spending, from infrastructure to defense.
"Failure to improve these programs also threatens them with insolvency, which will happen within a generation if we do not act now.
"In recent years, we have made important progress in some areas of fiscal policy.
"For example, we have begun to actually make federal agencies go through their budgets to identify and eliminate waste, fraud and abuse, and to set priorities and learn to do more with less.
"But the mid- and long-term projections from CBO show that our debt crisis is only going to get worse if we do not substantively deal with the fiscal policies that we have thus far failed to address, namely entitlement reform and pro-growth tax reform.
"The Committee for a Responsible Federal Budget recently noted that “most of the deficit-reduction agreements made since 1980 have been accompanied by a debt ceiling increase.”
"I joined fellow members of the Finance Committee recently in sending a letter to Secretary Lew suggesting that we again use the debt limit “as an opportunity to bring lasting reforms and debt reduction to our nation.”
"As a member of the Bowles-Simpson Fiscal Commission and the Gang of Six, I know there has been a lot of work done on this issue and both sides can find common ground.
"Tax reform is an equally important component of getting the debt under control.
"The current tax code is inefficient and burdensome.
"We need to dramatically simplify our tax code, reducing rates for all taxpayers so that we can create economic growth.
"I am interested in the thoughts of our panel on how the current tax code affects investment.
"The debt ceiling debate creates an opening for real progress in these areas.
"Now is the time to work together on solutions that reduce our deficits and move our economy forward.
"It is time to make these hard decisions."
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